Among U.S. networking stocks, Cisco Systems
CSCO, +0.57%
and JDS Uniphase
JDSU
were up 1 percent and 1.9 percent respectively.

In telecoms, ADRs of Ericsson
ERICY
surged 20 percent to $8.95 after the loss-making Swedish gear maker detailed more restructuring that will results in the loss of thousands of jobs.

U.S. April consumer confidence data at 10 a.m. should set a more definitive trend, traders said. Economists are expecting confidence to have recovered in April from March levels.

"The market is looking for further confirmation that recovery is under way, so if consumer confidence comes in below expectation equities could well give up yesterday's gains," Jim Morrison of London spread bettor Financial Spreads.

Ahead of the open, Dow Industrials component DuPont
DD, -4.11%
topped the expectation for its first quarter earnings and revenue gains, but the chemical company said it expects to earn in the "mid- to high 50 cents per share range" in the second quarter, below analyst forecasts of 62 cents, as energy related raw material costs are expected to be "significantly" higher.

Starwood Hotels & Resorts
HOT, -0.95%
reported a first-quarter net loss of $117 million, or 58 cents a share, versus a profit of 16 cents a share in the year-earlier period. The hotel operator said results were negatively impacted by weather, the global economic slowdown and the SARS (severe acute respiratory syndrome) illness.

European stocks were up, largely pricing in much of the overnight move. Very weak business confidence data for April surfaced in France, complimenting the weak Ifo confidence measure for German managers released on Monday. The weak indicators, landing post-U.S. military victory in Iraq, are bolstering hopes for interest rate relief.

Tokyo markets were closed, but South Korean stocks rallied as some reports fuelled hopes China is containing some of the SARS spread.

Telecoms were the sector in focus early Tuesday. Equipment makers Alcatel
ALA, +0.84%
and Ericsson each posted 30 percent drops in first quarter sales.

Sweden's Ericsson announced more restructuring plans to trim costs. As a result, it said sees its total work force "to approach" 47,000 next year from 60,940 at the end of the first quarter.

Alcatel's Paris-listed shares (013000) rose 3.7 percent to 7.49 euro. Alcatel said it expects second quarter sales are expected to increase sequentially at a single digit rate with a substantial narrowing of the operating loss. Ericsson ADRs surged 14 percent to $8.50.

In chips, foundry leader Taiwan Semi reported a 34 percent drop in its first-quarter profit, but expects a recovery in the second quarter. See full story TSM ADRs rose 7 percent to $.823.

"TSMC confirms the trend that it sees first quarter as the bottom quarter and expects sequential increases in monthly sales from March onwards," broker Julius Baer noted. "TSMC now expects average 80 percent utilization rate in the second quarter, which means June utilization should be even higher."

In tobacco, British American Tobacco (BATS) said first quarter operating profit, excluding goodwill amortization, declined 1 percent "reflecting very competitive conditions in the U.S. and the weakness of a number of currencies," it said. "There is no doubt that 2003 will be a challenging year for businesses generally."

BATS shares were up. Rival London-listed tobacco stocks Gallaher (GLH) and Imperial Tobacco (IMT) were down 0.8 and 0.2 percent respectively. Altria
MO, +0.21%
the Philip Morris stock, was down 0.2 percent in New York and was unchanged in London, dealers said.

On the overnight, Shares of Ariba
ARBA
added more than 5 percent after the business software maker said its second-quarter net loss narrowed from a year earlier while sales came in slightly higher.

Intuit
INTU, +1.41%
was up 5.2 percent, holding overnight gains after it affirmed on the quarter. Elsewhere, shares of Corning
GLW, -0.24%
were down 18 cents, or 3.2 percent, to $5.49 in Instinet pre-open trading after the fiber-optic cable maker announced late Monday that it would offer 50 million shares of common stock to the public at $5.43 each. The company plans to use the proceeds from the sale to reduce debt.

Broker calls included a downgrade on General Dynamics
GD, -0.54%
at UBS Warburg, to neutral from buy. The defense/aerospace stock was not trading in London. Warburg said it "given continued indications of weakness from our contacts in the business jet industry, we believe significant earnings risk still exists for 2003 and 2004."

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